BVI’s FSC denies 4XP’s claim that their accounts have been frozen

Last month we were among the first to break the story that 4XP were the subject of a warning published by Cyprus’s financial regulator CySEC, which stated that the firm was not and had never been regulated by CySEC. At the time rumours had begun circulating regarding the brokerages future and since then the firm has stopped processing client withdrawals and deposits claiming the firm had recived a cease and desist from the British Virgin Islands Financial Services Commission (FSC).

The news was broken to clients through a letter, with many clients of the firm being concerned regarding the safety of their funds. Additionally, it was revealed to a number of industry sources that the brokerage is in the middle of some internal changes with the firm breaking off its relationship with FXSales who provided sales, support and marketing services for the firm. As a result of this move a number of FXSales staff were made redundant sometime in mid October.

FXSales are one of a number of brokerage support services providing certain support for brokerages, while allowing brokerages to operate from a tax and regulation friendly offshore centre. With the service company being an officially different company a number well known and established brokerages operate using such services. In a comment to ForexMagnates, one senior executive of the firm stated that 4XP would continue operating after the split from FXSales but he was not in the position to say who would provide client services for the firm. Despite these words many people believe that 4XP is in the process of shutting up shop.

British Virgin Islands rejects the claims of 4XP

After the split from 4XP clients of the brokerage have been reporting that they have been unable to get into contact with representatives from the firm. As already touched upon, 4XP then sent a letter to clients stating that the “Company has received an immediate and surprising cease order, issued by the British Virgins Islands FSC, ordering the Company to cease its trading services operation. The Company has applied to the FSC against the order, and is considering other legal venues to renew its operations.” With the letter going on to elaborate that “the Company is currently unable to process deposit and withdrawal requests, until further notice. The Company hopes such notice shall not take long.”

However according to the FSC of the British Virgin Islands the firm has never been regulated by the body and did in fact receive a cease and desist letter back in June. This seems to suggest that 4XP’s claims that the cease and desist was surprising to be rather unfounded, as the firm has had a while to respond to the regulators demands. The information regarding the cease and desist order from the FSC can be found on the regulators website and clarifies that the regulator has not prevented the firm from returning monies that had been placed with it. Due to this fact some have suggested that this may be an indication that 4XP is shutting up shop and taking its clients monies with them.